Countering America’s Adversaries Through Sanctions Act (CAATSA)

The Countering America’s Adversaries Through Sanctions Act (CAATSA) is a United States Federal Law that has imposed sanctions against Iran, Russia and North Korea. This act prevents trade partners of the United States in entering into bilateral contracts with these three nations.

The bill was passed on 27 July 2017. Since India has commercial and defensive contracts with Iran and Russia, the CAATSA does have an impact on India’s foreign policy.

This article will give further information about CAATSA which will be of immense use for candidates appearing for UPSC 2023.

Recent updates on CAATSA – 

• Recently, a legislative amendment that grants India relief from America’s harsh CAATSA sanctions in exchange for its acquisition of the S-400 missile defence system from Russia to help deter aggressors like China has been approved by the US House of Representatives by voice vote.
• The legislation was approved on July 14, 2022, during floor discussion of the National Defense Authorization Act as a part of an en bloc (all together as a single unit) amendment (NDAA).
• The legislation says that the United States-India Initiative on Critical and Emerging Technologies (ICET) is a welcome and essential step to developing closer partnerships between governments, academia, and industry in the two countries to address the latest advances in artificial intelligence, quantum computing, biotechnology, aerospace, and semiconductor manufacturing.
• Previously, in accordance with the CAATSA, the US has already imposed sanctions on Turkey for its acquisition of a number of Russian-made S-400 missile defence systems.
• Following the US sanctions on Turkey over the procurement of S-400 missile systems, there were apprehensions that Washington may impose similar punitive measures on India.

Background 

The S-400 Triumf Missile System is an anti-aircraft missile defence system created by Russia’s Almaz Central Design Bureau. Triumf is Russian for Triumph. As India has made preparations to purchase S-400 missile systems from Russia, they have frequently been in the news. However, the United States has voiced strong opposition, if not outright condemnation, to the proposal.

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Why was CAATSA Enacted?

The Countering America’s Adversaries Through Sanctions Act came against the backdrop of three events that would have serious implications regarding geopolitics. They are as follows:

1. Iran’s Nuclear Missiles Program: The United States Government believed that any progress in Iran’s nuclear missile program would further destabilize the Middle East as Iran has repeatedly made threats against Israel, a key NATO and United States ally. The CAATSA gives authority to the President of the United States to impose sanctions against any party involved in the sale and transfer of military technology to Iran.
2. Curbing Russian influence: The Russian annexation of Crimea in 2014 and allegations of interventions in the US polls of 2016 was the catalyst for the CAATSA against Russia. Under the act sanctions can be imposed on Russia should the state or private individuals be found involved in activities such as cybersecurity, crude oil projects,  financial institutions, corruption,  human rights abuses etc
3. North Korea and weapons of mass destruction: North Korea has a nuclear weapons military program and as of 2020 it’s estimated missile arsenal includes 30-40 warheads with enough fissile materials to produce 6-7 missiles per year. North Korea has made repeated threats against its South Korea repeatedly and also against the United States.

Previous administrations before had put sanctions against the North Korean dictatorship. But what makes the CAATSA different is that the bill modifies and increases the President’s authority to impose sanctions on persons in violation of certain United Nations Security Council resolutions regarding North Korea along with a wide range of other economic sanctions that can cripple the already fledgeling North Korean economy.

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What is CAATSA?

• The US passed the CAATSA law in 2017, and it was designed to use economic sanctions to target nations that have close ties to Iran, North Korea, and Russia. According to the report, at least five different types of sanctions will be imposed to nations that engage in “major transactions” with Russian intelligence and military agents.
• 39 Russian enterprises, including all the major defence firms including Rosoboronexport, Sukhoi Aviation, and Russian Aircraft Corporation MiG, are alerted by Section 231 of the statute regarding transactions that may result in sanctions. This list includes Almaz-Antey Air and Space Defence Corporation JSC, the company that created the S-400 system.
• However, the S-400 is not the only item covered by CAATSA; any joint ventures for the production or development of weapons in the future, as well as any other significant agreements with Russia, may also be covered.

Exceptions: 

• Ordinary transactions will not invite sanctions, and the decision of who has sanctions imposed on them comes down to the interpretation of “significant transaction”.
• One of the many waivers or exclusions indicated includes the fact that the deal won’t have an impact on US strategic interests or jeopardise the alliances to which it is a party, among other things.

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Implications for India regarding CAATSA

The India-United States relations, especially when it comes to the defence aspect, has grown exponentially since 2008. At least by 2019, about $15 billion worth of weapons has been purchased by India. Historically, India also purchased its weapons and the subsequent comments from Russia since the days of the Cold War. Keeping this in mind United States lawmakers had specifically told the senate that the sanctions should not affect major defence partners such as India

The S-400 Triumf missile system, which has sophisticated skills to assess the distance from a target and conduct a surface-to-air missile attack, has been purchased by India. India paid US$ 5.5 billion for five of these systems in 2018, and their delivery started in November of that same year. They had been stationed in Punjab.

A waiver of such CAATSA for India had been under consideration since the law had come into force but little headway has been made in that regard. In fact, India was threatened with sanctions when it decided to buy the S-400 missile launchers from Russia and buy crude oil from Iran. What was worrisome for India was the example of Turkey who, despite being a key NATO ally, was expelled from the US F-35 fighter jet programme when it purchased S-400 missile systems from Russia.

Yet India went ahead with the S-400 deal in 2018 with no negative reaction from the United States government. The delivery of the S-400s is expected to finish by 2025. Lately, the United States Government has stated that although a waiver is not possible at this time, a blanket application of sanctions against India for its defence contracts with Russia is also not being considered.

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Why CAATSA was not Imposed on India?

• It was never explicitly stated by the US that CAATSA would apply to India. According to a report from March 2022, the US valued India as a vital ally in the region and India is currently a highly significant security partner of America.
• India has always maintained an autonomous foreign policy. This also holds true for the defence supplies and purchases it makes, which are determined by the interests in national security. 
• India has maintained its neutrality and refused to join any of the sanctions on Russia put in place by Western nations, despite the ongoing turmoil in Ukraine and the US tightening its position against Russia. 
• India has previously made many references to the necessity for S-400 missiles for border defence against China.

CAATSA: UPSC Notes:- Download PDF Here

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Criticism against CAATSA

Needless to say, the Countering America’s Adversaries Through Sanctions Act has been met with derisions from North Korea, Russia and Iran. But the negative feeling has not only been restricted to the United State’s adversaries, but key partners such as the European Union have felt that the CAATSA sheds a negative light on United States-European relations as many of them have gas line projects signed with Russia.

Geopolitical think tanks have argued that the CAATSA will hamper the United States Asian allies in resisting a rising Chinese influence. Another implication is that this would also discourage other nations from building a defensive relationship with the United States with a view to avoiding any future compromises regarding strategic autonomy. These experts believe that if the CAATSA is implemented haphazardly, it could eventually backfire on United States policy in the near future.

Click on the links to aid your IR preparation:

1. Booklist for IAS International Relations
2. UPSC Previous Years’ International Relations Questions of Mains GS 2

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